PALM SPRINGS FOREIGN-TRADE ZONE

The City of Palm Springs offers a great OPPORTUNITY to Save money, defer duties and improve cash flow. Unique among Foreign-Trade Zones, Palm Springs is on the cutting edge in today’s global marketplace. Strategically located in the center of Southern California, it is the ideal location for same day access to nearby Mexican trade gateways and West Coast ports. Importers who rely on Asian/Pacific markets will find affordable distribution to North and South American markets.

The City of Palm Springs established a Foreign-Trade Zone (FTZ) to encourage and facilitate international trade. World renowned for quality of life and recreation, Palm Springs is an ideal location for 21st century business operations. Spirited public/private partnerships, an outstanding
workforce, affordable housing, global connectivity and world class meeting and recreational facilities make this FTZ unique among others.

For those of you who are unaware, a Foreign-Trade Zone is a secured area outside the U.S. Customs territory. In other words, as far as U.S. Customs is concerned, items entering the zone have not officially entered the U.S. and are not subject to any import taxes, duty, etc. The advantage of foreign-trade zones to importers and exports is the ability to defer, reduce or eliminate the payment of U.S. Customs duties. Customs duties are deferred in FTZ’s when merchandise is admitted to the zone without a formal customs entry or payment of customs duty. When merchandise is removed from a foreign-trade zone, Customs duties are eliminated if the goods are then exported from the United States. If the merchandise is formally entered into
U.S. commerce, Customs duties and excise taxes are due at the time of transfer from the foreign-trade zone. For merchandise that is manufactured in a foreign-trade zone, the importer may elect to pay Customs duty at the rate of either the finished product or its foreign components, whichever is lower. In this manner, use of a foreign-trade zone can result in the reduction of Customs duty owed by companies that manufacture products in a FTZ.

Foreign Trade Zones benefits include:

  • Duty deferral, elimination or reduction
  • Maintenance of quota control
  • Eligibility for certain tax exemptions
  • Elimination of duty drawback procedures

Merchandise entering a zone may be: Assembled, Displayed, Stored,
Tested, Repaired, Manufactured, Sampled, Manipulated, Salvaged, Re-labeled, Mixed, Destroyed, Repackaged, Cleaned, Processed and Re-exported.

Other advantages include:

  • Imported materials processed in a zone and exported incur no duty
  • Domestic materials are only taxed when they leave the zone
  • Certain tangible personal property may be exempt from state and local ad valorem taxes
  • Custom security requirements provide protection against theft
  • Merchandise may remain in a zone, duty-free indefinitely
  • The zone user may choose whether to pay the duty rate on materials imported into the zone or on the finished product leaving the zone
  • Zone to Zone transfers
  • Increase inventory control systems efficiency and competitiveness

If you need more information, let me know and I will get you to the proper city personnel.  My thanks to the City of Palm Springs for the above content.

Best regards,

John Pivinski
Vision Marketing of Palm Springs

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